Macdonald pushed big miners out: ICAC

Former NSW resources minister Ian Macdonald pushed for big miners to be excluded from bidding for mining licences in the Bylong Valley, a corruption inquiry has heard.

Mr Macdonald is accused of favouring his former colleague Eddie Obeid by granting an exploration licence over the Mt Penny tenement in the Bylong Valley, where the Labor powerbroker and his family owned property.

The Independent Commission Against Corruption (ICAC) has previously heard that it would be easier for outsiders to benefit from mining in the Bylong Valley if only junior miners were involved.

The ICAC on Tuesday was told that it was Mr Macdonald's idea to shut out larger companies from bidding for mining licences over the area.

Mr Macdonald's former deputy chief of staff, Jamie Gibson, said the topic was discussed in a meeting in mid-2008 at which he was present.

"Whose idea was it that the larger companies should be excluded?" Commissioner David Ipp asked.

"And was this a view that he was putting forward at this discussion?" Commissioner Ipp then put to the witness.

"Yes commissioner," Mr Gibson replied.

Mr Gibson said Mr Macdonald's opinion was opposed by the then deputy director-general of the Department of Primary Industries, Alan Coutts.

"Mr Coutts' attitude was that it should be an all-in process, to my recollection," Mr Gibson said.

The inquiry has previously heard that Mr Coutts and Mr Macdonald had clashed repeatedly over the rush to open up 11 areas of the state to coal mining, including Mt Penny.

Counsel for Mr Macdonald, Tim Hale, said his client had expressed the view that because big miners were likely to succeed in bids for exploration licences, complaints would continue from small and medium miners.

He also said Mr Macdonald had expressed the view that if big miners obtained mining licences they could "land bank" them.